MUMBAI: The runaway success of Baba Ramdev’s Patanjali brand has had a halo effect on the entire ayurvedic consumer products segment, helping it outpace the overall consumer products industry in growth, according to the latest data.

Ayurvedic products now reach 77% of Indian homes, up from 69% two years ago, even as top fast-moving consumer goods (FMCG) companies, including Hindustan Unilever and Colgate-Palmolive, have been aggressively launching natural products and extending their reach to stop Patanjali and other ayurvedic product makers such as Dabur from eating into their market share.

In the quarter ended March, ayurvedic products grew 60% in volume from the year earlier while the overall FMCG segment grew 6%, according to data from Kantar Worldpanel, the consumer insights arm of WPP.

The overall FMCG segment added 2.8 million households during the quarter to reach about 275 million homes.

Ayurvedic brands had significantly higher addition of 23 million during the same period and increased penetration to 183 million households.

Experts attribute the rapid growth of this segment to Patanjali, which harnessed the wellness platform to challenge multinationals such as HUL, Colgate and Nestle in the consumer products space with several ayurveda-based products including toothpaste, shampoos, and cookies that

helped it grow into a Rs 10,000-crore company in less than a decade. This prompted established FMCG players to get into ‘natural’ segment.

“Companies that lacked ayurvedic or natural offerings within their portfolio have now joined the bandwagon as they have realised that the opportunity is huge and consumers are moving in that direction,” said Devendra Chawla, group president, FMCG and brands, Future Group. “Also, they are tweaking their existing products to include herbal variants, which in turn has grown the overall market.”

L’Oreal, for example, has launched a hair care range under Garnier Ultra Blends made with “natural ingredients”, while Colgate brought the Cibaca Vedshakti brand to the market.

The country’s largest consumer products maker HUL, which launched the Lever Ayush brand last year, recently brought Citra, an organic skin care brand from Indonesia, to the country and has also rolled out a naturals variants under brands like Tresemme and Fair & Lovely.

BIG PLAY“We sensed that ‘natural’ will become a big play nearly 15 years back, but it was a bit ahead of time,” HUL managing director Sanjiv Mehta told ET last month. “Natural as a phenomenon is not just restricted to India, but we are seeing this in different parts of the world and are manifested in different ways such as chemical free, organic, herbal, khadi or ayurveda.”

Patanjali has also fuelled the expansion of the country’s herbal products market and helped even its rivals in this space sell more home and personal care products, while grabbing share from multinationals.

For instance, Colgate’s share in the toothpaste market fell the steepest in a decade by 180 basis points in FY17 to 55.6%, while ayurvedic toothpaste makers Dabur and Patanjali gained 300 basis points during the same period. A basis point is 0.01 percentage point.

KK Chutani, executive director for consumer care business at Dabur India, said the firm has launched a “future-ready” strategy to make ayurveda “more contemporary” and promote it among the new generation.

Under this strategy, the maker of Real juice and Vatika hair oil have rolled out an initiative to build advocacy for its portfolio of over-the-counter (OTC) and ethical products by engaging with more than 30,000 healthcare professionals.

“Modern day science is the greatest tool that not just helps validate the benefits of this age-old wisdom, but also helps the new generation embrace this traditional science with greater ease,” Chutani said.

Within ayurvedic products, personal care brands have the highest penetration of 65% followed by 9% for household products, according to Kantar. The reach for ayurvedic food products, however, remains low at 1%, it said.

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